Friday Flashback: WA Realtors’ Hilarious 2007 “FACTS”

THE FACTS STRAIGHT

The banner you see above is from a massive late 2007 ad campaign from our very own Washington Realtors that is a veritable gold mine of hilarity just three years later. Of course, the entire thing has long since disappeared from the Washington Realtors’ website, but guess who saved most of the material on his computer?

Here’s a trio of 1-minute radio ads that ran as part of the blitz.

“In Washington, our home values continue to appreciate.”

“The facts are, home values are still appreciating in Washington.”

“Our housing market is the envy of the nation!”

That last one is still my favorite. Here’s a longer quote:

Our housing market is the envy of the nation! Why? Because Washington has a strong economy, and job growth, and very little unemployment. In fact, we are projected to add a ton of new jobs in the next few years. What that means is: buying a home in Washington is one of the smartest investments you’ll ever make.

“A ton of new jobs” is a technical term used by people in the fact-spreading industry.

Additional amusement awaits in the “facts flyer,” newspaper ad, and mailable brochure (all pdfs). Here are a few choice quotes from these (bonus points if you can spot the basic grammatical error in the newspaper ad):

On October 15, 2007 Washington REALTORS will expose the truth about the strength and stability of the Washington housing market.

We are tired of listening to the doom and gloom of the national media. What is going on in Florida, southern California and other parts of the country does not represent the market in Washington.

Our Key Message
The Washington real estate market is a stable and an excellent investment that you get to live in!

The Market is StrongThe Market is Stable

Why Washington Is Different
The home market isn’t keeping pace with the growth of the state’s population…

Washington has a strong vibrant real estate market. Purchasing a home in Washington is an excellent long term investment.

You might say that this stuff is only funny in hindsight. You would be wrong. I was laughing when it first hit in 2007, too. On-market inventory had been steadily growing for over a year and a half while the number of closed sales had been dropping for two years. Although home prices had only been falling for three months, the writing was on the wall.

I pity anyone who was gullible enough to buy this crap just as home prices began their long slide to the bottom.

The purpose of our Friday Flashback series is to remind people why it’s never a good idea to base your home purchase decisions on the word of someone with a vested financial interest in selling as many homes as possible for as much as possible, no matter what. If you’ve got a good example of local home salespeople or other industry shills on record making fools of themselves in the years before the bubble burst, shoot me an email.
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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

33 comments:

  1. 1
    Buy My House, Idiot Renters! says:

    Who are you going to listen to – a bunch of nobodies living in their mother’s basement who are too unmanly and scared to play The Game, or Qualified Real Estate Professionals?

  2. 2
    David Losh says:

    What about today? What about the number of people who are buying today?

    How about some statistics on the housing unit supply, building permits, and approval of multi family building permits?

    The part about jobs is true. We have an unlimited growth potential here in Washington. What I would really like to see is the number of housing units to population, and the number of inclomplete property developments, and the pricing for new housing units verses the bank owned we have today.

    I’m also very interested in the number of vacant units we have in Washington.

  3. 3

    More Similar “Hilarious Hype” Written in 2010

    Read the Seattle Office of Economic Development hype, article in part:

    “…From his presentation, which can be found on the Greater Seattle Chamber of Commerce’s website, we can deduce three main elements that will drive the “next economy.” Those main elements are exports, innovation and low carbon economies. For example, a low carbon-focused economy will provide the jobs of the future. They will create markets that will spur job growth in industries, including, but not limited to, infrastructure, energy, and mainstream production of consumer goods and services….”

    http://bottomline.seattle.gov/2010/11/08/what-will-drive-the-next-economic-boom/

    You notice they don’t tell you what “low carbon economies” are….maybe we invent ways of “not eating”? Job growth in industries….LOL….what will we make that China can’t make for 1/10th our labor costs? Infrastructure…LOL….requires more income tax base, that’s dwindling to nothing, so paying for it is too. This one I really like: “mainstream production of goods and services”, is this like McDonalds Hamburgers and Walmart sales?

  4. 4
    mukoh says:

    In a way that whole realitor talk wasn’t wrong when you compare our area to places like Tuscon, Vegas, Pensacola, Sacramento. Houses in Tuscon are now at $75k for bulk sales and even less at times. They were previously up to $300k. Not so pretty.

    A friend of mines corprorate net worth 25% is in a Tuscon project of 1500 developed lots. Granted it was through mergers and exchanges that he got it, it is worth 15% of it past value that he had it on the books. Thats huge WOOPS.

  5. 5
    YoYo says:

    Grammatical error: you can’t live in the market, you live in a house/condo.

  6. 6
    Hugh Dominic says:

    The market is not a stable.

  7. 8
  8. 9
    hrpuffinstuff says:

    I would say its more than unethical but imoral for “professionals” to hype the market as they did then and as they are still doing. I would guess more than one family was persuaded away from financial security into complete ruin with these kind of statments,

    And all that entails: No security, retirment, college for kids, taking care of sick relatives, safe reliable car, preventive medical care, happy lives…

  9. 10

    Seattlites are nothing except solipsists. They truly believe that nothing can touch them or their economy and everything they make is so high quality there are no competitors. No matter that Boeing fled, or that open source Android rules the embedded chip.

  10. 11
    Vellebue Renter says:

    Well I suppose technically he wasn’t lying about the “ton” of new jobs. I believe “a ton” is equal to 2000. So here it is a “few years” later and I am sure we have added at least that much but lost quite a few more.

  11. 12
    ray pepper says:

    “I would say its more than unethical but imoral for “professionals” to hype the market as they did then and as they are still doing”

    “Unethical” is out the window my friend.

    If you watch the number of buyers I see week and and week out at the Trustee Sales buying their homes back through another 3rd party or newly established LLC it will shock you right back into reality. Wait till DateLine or 60 Minutes runs a clip on this. The short sale fraud has been very well documented.

    The flood gates are gonna open because the stupidity will not go on forever. They better ramp up the dropping of these principles quick and Loan Mod the hell outta these loans. What in the past caused people to hide their head in shame yesterday reacted in high 5’s and congratulatory handshakes on the steps of the Courthouse.

    Amazing one unfolded with a debt in excess of 450k bought back at 197k right in front of me. Came outta the gates at 174k and 6 bidders qualified themselves. (thats more then usual). When it was over everyone chatted it up telling their partners you cannot compete (bid) against a homeowner that has his money lined up and ready to go.

    Whoosh…over 250k swept under the carpet and the owner didn’t even have to move a box.

    Yes…………………….people will only remain stupid for so long and wait till the (semi-hard money) institutions get their money lined up for homeowners on a large scale…….

    Our beloved Niehaus said it best………………….My oh My!………………

  12. 13
    Lake Hills Renter says:

    The mere existence of this campaign shows they were lying. You don’t need marketing propaganda when things are steamrolling forward because people are already bought in. You only need it when things are starting to falter and you need to reassure people that, despite what they are seeing before them, the ponies really are still pink. If they have to say it, then they are already wrong.

  13. 14
    Mel Torme says:

    RE: Vellebue Renter @ 11 – No, a ton does not equal 2000. One ton = 2000 lb (One metric ton = 1000kg = ~2,200 lb, BTW). Units, units, units!

    Anyway, I guess you could say they meant 2,000 lb worth of jobs, which could be many possibilities: 20 cute starbucks girls, 14 McDonalds teenage workers (I’m including zits in the overall weight here – may not be as insignificant as you think), 11 warehouse workers, 12 Boeing engineers and one machinist, 11 big, fat software people who call themselves engineers, or 8 TSA slobs at SEA-TAC. It’s kind of open-ended.

    Indeed, a ton of jobs! (That one sentence of yours, Tim, is as snarky as one can get. I love it – especially the phrase “fact-spreading industry”! Ha, ha.

  14. 15
    calvis says:

    By ray pepper @ 12:

    “What in the past caused people to hide their head in shame yesterday reacted in high 5’s and congratulatory handshakes on the steps of the Courthouse.

    It’s all part of the ‘Sticking it to the Man’ generation that we live in. I wish I had the guts stick it more to the Man without fear of backlash.

  15. 16

    RE: calvis @ 15 – Beyond the fact that the bank could elect to proceed judicially if they thought their borrower was sound, the commercial buyers that Ray deals with might not have all the same protections as owner-occupied borrowers. See subpart 3 of this section:

    http://apps.leg.wa.gov/rcw/default.aspx?cite=61.24.100

    Note though the term “commercial” is a bit vague. Does that include an investor buying a SFR property? I could argue that one either way.

  16. 17
    Hugh Dominic says:

    By ray pepper @ 12:

    If you watch the number of buyers I see week and and week out at the Trustee Sales buying their homes back through another 3rd party or newly established LLC it will shock you right back into reality. Wait till DateLine or 60 Minutes runs a clip on this. The short sale fraud has been very well documented.

    I’ve seen a few short sale cases where I have to believe it was an inside job. ALLPRO real estate – are they just a shill? The listing shows zero interest in marketing the property, the price is too high, five months go by and viola! The property has sold to a developer for 30% below list price. I think the listing agent deliberately steers interest away from the property in order to help his developer/partner land it at a steal.

    Possible?

  17. 18
    Compound Interest says:

    Tim,
    This post is just too good to let die in the archives. You really should set up a “Best of Seattle Bubble” link, where doozies like this one can remain (near) center stage for future visitors to enjoy and benefit from. I’m thinking this one, your spring plot of “affordable versus median home price” that clearly shows another 15% correction coming, and a few others. Perhaps you can have people click a “best of” link on each post if they like it and then sort accordingly.

    I have a “Best of SB” folder on my mac and dump a screen shot of your graphs or text into it now and then, so this will save me, and I suspect others, the work.

    One last anecdote: About the time I started reading SB, a real jerk arrived at the office from back east and began the house-hunt, loud and boastful. It ended a couple years later with him putting down $900k for a 2200sqft Ravenna house-of-I5-noise, closed July 2007. Ah, the Schadenfreude!

  18. 19
    Jillayne says:

    Ray, regarding ppl buying their homes back at the auction, help me out here:

    Homeowner is going into foreclosure so he just lets it go all the way to the auction date, hoping the lender will cut the opening bid far, far below the payoff.

    Homeowner lines up hard money loan (from wolfie) and is lucky enough to have the opening bid slashed. Homeowner shows up w/a cashier’s check from wofie and then quickly refinances into a traditional conforming loan within a few months.

    Wait a minute…if the person was in default that’s going to be a tough loan to get so I’m sure the loan terms aren’t all that favorable…higher rates and fees for the hard money wolf and higher rates and fees on the refinance.

    The second problem I see is this: How can a homeowner be assured that the lender is going to lob off several hundred thousand from the opening bid at the trustee sale?

    Are we to assume that ALL TRUSTEE SALES that you’re seeing in Pierce County, 100 percent of them, are always discounted by 30 percent or more?

    If so, that would indeed be very big news. So talk. I am listening.

    If not then a homeowner would be taking a huge risk in assuming he/she can >easily< buy their home back at auction.

    At the King County auction I attended on Friday there were about maybe 5 or 6 ppl with cashier's checks bidding, under 200 scheduled for auction. Some were postponed, a handful were sold to high bidders, and the rest were deeded straight back to the bank with no bidders. From what I'm seeing in King, not every house has the opening bid slashed.

  19. 20
    Jillayne says:

    Grammar police….Under “key message”
    Ending a sentence w/a preposition: “that you get to live in!”

  20. 21

    Foresight is a great thing. If only we could predict the future and control our greed and fear roller coaster tendencies. Yeah, right!

  21. 22

    RE: Jillayne @ 19 – I think he may be talking of investor types–who bought a rental at the wrong time and now are trying to make up for that. I would agree financing would be a huge issue, but they might not have had great financing in the first place.

  22. 23
    Scott Weitz says:

    RE: Kary L. Krismer @ 16

    The RCW is a bit confusing…that applies to waste and rental income for commercial properties. Still no deficiencies for commericial properties (sans Personal Guarantee).

    As for judicial foreclosures, they are so unbelievably rare that I would almost say that option does not exist these days. Remember, foreclosing judicially provides a 1 yr redemption period for the borrower, and the ability to give the ‘produce the note’ argument in the discovery process. Unless congress signs a law giving banks a pass on producing the note, I highly doubt the stream lining of non-judicial foreclosures will change in WA.

  23. 24

    RE: Scott Weitz @ 23 – I would agree the statute is poorly written, but I suspect most entity (LLC, corporate, etc.) loans have personal guarantees. The only exception would be a straight partnership.

    Also, with this type of property the one-year redemption period does not include the right to live there, so it’s not as burdensome. And as a practical matter, the lender doesn’t care if someone else buys the property, as long as the debt is collectible.

    The produce the note thing is probably a non-issue in most cases.

  24. 25
    Scott Weitz says:

    RE: Kary L. Krismer @ 24

    PG – sure, its case by case for businesses – the issue arises more for investment properties, which I would argue are commercial in nature – yet have no PGs, thus no deficiency ability.

    Redemption period – The problem is that the banks can’t sell the property. Who would issue the title insurance if the old owner can redeem at any point w/i a year?

    Produce the Note – Go to a FL court!- its a big deal to be able to easily request the note/ argue against MERS issues in discovery vs. having to bring a Restraint of t/ee sale in WA….the judicial foreclosure is a huge pain in the arse for banks. Look at the states that banks have continued to halt foreclosures = all judicial foreclosure states. That’s not a coincidence.

  25. 26

    RE: Scott Weitz @ 25 – Remember, this conversation is in the context of the investors Ray is talking about on SFR. When you’re dealing with very large entities, such as perhaps one that might own South Center and several other similar properties, there probably isn’t a personal guarantee. But for the type of entities we’re discussing, they would probably need to be much larger before a bank would loan them money without one.

    As to the redemption rights, that would just be an exception to the title policy. That the right exists would hold down the price obtained, but if it goes too low the possibility of a redemption increases. Some people would be willing to take that risk.

    As to the note, I don’t think it’s a big deal because I think this would be very rare. Once the bank identified a situation to possibly pursue, they could look for the availability of the note.

  26. 27

    […] Lisota on November 15, 2010 in Seattle Real Estate Tweet Tim Ellis from Seattle Bubble saved an ad campaign run by the Washington Realtors in late 2007. The campaign pitched the “strength and stability” of the Washington housing market, […]

  27. 28
    LA Relo says:

    I am amazed at home many people in this area think Seattle is at or near a recovery.

    Seattle trails most of the still-correcting bubble markets, yet the “experts” and “owners” alike are all convinced it’s different here. I assure you it’s not.

    Go to zillow and search only “make me move” homes, then compare the make me move price, to the zestimate. Some are close, but most that I saw were 30, 50, or close to double the zestimate, but by all data relevant date prices are still FALLING!

    The kool-aid party ended 3 years ago, but plenty of people are still hung over.

    You can sum up the direction of the housing market with a few key stats: interest rates (yes, low), inventory levels (rising), sales volume (falling), price to rent (still high), unemployment (flat at best) and income (flat at best, arguably falling).

    I challenge, nay, DARE! I dare any housing bull to point to one of those factors and find a trend that is moving in favor of housing. Even interest rates, while low, are not going lower.

  28. 29

    By LA Relo @ 28:

    Go to zillow and search only “make me move” homes, then compare the make me move price, to the zestimate. Some are close, but most that I saw were 30, 50, or close to double the zestimate, but by all data relevant date prices are still FALLING!

    First, I’d disagree with your theory that how long a market has been falling has anything to do with when it will recover (sort of the Seattle is 18 months behind San Diego theory), but as to the quoted material, what’s the point of computing the difference between one inaccurate number with another? ;-)

  29. 30
    Everett_Tom says:

    RE: Kary L. Krismer @ 29 – I’d have to agree with this.. several years ago we owned a house in CA, we set a make me move price on zillow… it was exactly that… a price someone would have to pay to make us move when we weren’t really looking to move… it was at least 2x the “real” price of the house…

  30. 31

    RE: Everett_Tom @ 30 – I haven’t bothered to look, but how long does a Make Me Move price stay up on Zillow. It could be an unrealistic price from 2007? ;-)

  31. 32
    Everett_Tom says:

    RE: Kary L. Krismer @ 31 – I think it stays until you take it down… we removed it after we sold the house.. for like 35% of the make me move price :) (we sold in 2007 – 3 year or so after setting the make me move thing).

    Not sure if it’s re-set automatically by a sale of the house.

    The make me move price was unrealistic for 2004/2005 when it was set.

  32. 33
    LA Relo says:

    RE: Kary L. Krismer @ 29

    It has less to do with equating time, as it does the fact the most of the problematic mortgages are adjustable rate, and most of those are 3 years. If SD peaked in ’05 then a lot of those problem loans would have played out in ’08 and in ’09. Seattle peaking in ’07 means we’re playing things out now and well through early ’11. Maybe even late ’11 thanks to gov’t delays.

    There’s a psychological game at play as facts come in, but people, conditioned by Realtors that prices never go down, refuse to accept that they are.

    Seattle didn’t jump as much, so it could end earlier, but my argument is that we are not at or near a bottom now, and the lag in home”owners” accepting this is an indication that Seattle is behind other areas that have. Ask someone in LV if prices fall.

    Maybe some people only put a make me move price for fun, but it seems to me one would only put that if they planned to move fairly soon, and I suspect some believe their home is actually worth that price.

    For more anecdotal evidence of this denial look at how many homes have been listed for 180+ days.

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